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TMI Blog1986 (10) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter 85, the goods imported in a given number of pieces and described as 'Silicon Power Transistor Chips' would stand excluded from the category of 'miscellaneous and chemical products' as they have acquired the essential characteristics of a 'semi-conductor device', and that the entry under Sub-Heading 85.18/27(1) was wide enough to cover these type of 'diffused chips' of silicon because of the expression employed; namely, 'similar .semiconductor devices'. 2. Appeals, taken to the Appellate Collector of Customs, against the individual orders of rejection of refund applications, were also rejected on the same view by means of impugned orders,listed above. Barring the last case (of Appeal No.C/2324/83-B.2), all the previous orders were passed by the same Appellate Collector holding that goods having been once treated as 'semi conductor devices', they stand excluded from the ambit of Notification No.l72/77-Cus. However, the Collector of Customs (Appeals), Madras in the last-mentioned case, dealt with an additional argument advanced on behalf of the appellants; namely that Notification No.30/81 dated 1-3-1981 indicated, vide column 3 against Serial No. 7, that silicon in all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (Appeals), in a part of the impugned order of appeal, to the effect that : "No doubt the diffused chips or wafers, by themselves, could not be treated as semi conductor devices in the commercial sense of the term". It is pleaded that having said so, the Collector of Customs (Appeals) went wrong in coming to the conclusion that, nevertheless, the imported chips had acquired all the essential characteristics of 'semi conductor devices'. This part of the appellate order; namely, that imported goods have acquired the essential characteristics (emphasis supplied) of a 'semi conductor device', is assailed on the view that the 'Process Flow Chart' of power transistors, filed before the Collector (Appeals), clearly indicated numerous and intricate processes to convert the imported 'silicon diffused chips' into a 'semi conductor device'. It is pleaded that, till that stage is reached, the goods clearly fell under Chapter 38 as one of the 'miscellaneous chemical products' and that the Collector of Customs (Appeals) erred in classifying them under Chapter 85.18/27(1) CTA, by invoking Interpretative Rule 2(a) of the Customs Tariff Act. The appellants plead for a realistic approach to the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants in all these appeals of the hearing whereas Shri J. Gopinath, SDR, appeared for the respondent. 9. Shri Venkataraman elaborately explained the meaning and import of the expression 'diffusion' vis-a-vis the characteristics of 'semi conductivity' starting with the primary raw material; namely, 'silicon' and, then, the very first process of doping. He also invited our attention to the 'Process Flow Chart' filed by the appellants in the paper-book which, very lucidly, explains the various processes which are carried out on the chips, imported in a 'diffused' stage, and before they are invested with the character' of a : 'semi conductor device', and that the authorities below fell in error by holding them to be so, with the aid of interpretative Rule 2(a). 10. He further argued that reliance on Explanatory Notes to the CCCN, which seems to have been, the guiding factor for the Collector of Customs (Appeals) while passing all the orders, did not reflect a correct approach as this Tribunal has held in a number of cases that the Explanatory Notes to the CCCN have no binding force and could, at the most, have a persuasive value. He contended that, when the relevant Chapter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two could not be equated. 13. While strongly canvassing for classification of the goods under Chapter 38, Shri Venkataraman argued, in the alternative, that even when the imported chips could be treated with the aid of Interpretative Rule 2(a) to be falling under T.I. 85.18/27(1) of the CTA; the authorities below have definitely erred in treating them as excluded from the scope of Notification No. 172/77-Cus., dated 3-8-1977, on the basis of the 'exclusion clause' vide column-4 against Serial No. 8(ii) of the aforesaid Notification. He argued that a plain reading of this Notification gave a clear indication to the effect that all goods, falling under Sub Heading No. (1) of Heading 85.18/27 of the CTA, were entitled to concessional rate of duty at 60% ad valorem, barring those which fall in the category of 'diods, transistors and similar semi conductor devices'. In the light of the processes - explained earlier - carried out on these imported chips to reach the stage of 'silicon power transistors' (semi conductor devices), Shri Venkataraman contended that the two were definitely distinct entities and the appellants could not be denied the benefit of this Notification by v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f, within the category of finished products. He, thus, strongly defended the classification of the imported chips under TI 85. 18/27(1) of the CTA. When asked about the scope of Notification No. 172/77-Cus, particularly in view of the order passed by the Collector of Customs (Appeals), Madras, on 6-2-1985 which, according to the appellants, had not been challenged by the Revenue, he had no comments to offer. It was, however, conceded that no appeal has been taken by either side, challenging the view taken in this order. 16. Shri Venkataraman, in a short rejoinder, reverted to his plea for classification under Chapter 38 on principle, adding that for practical purposes, the appellants' refund claim would be equally satisfied, even if it was not so held, in case the goods are held to be falling within the purview of Notification No. 172/77-Cus. 17. We have given our earnest consideration to the matter in the light of lucid exposition offered by the learned Consultant as regards the nature and composition of the imported articles, and the materials supplied in support thereof, in the form of 'Process Flow Chart', which remains undisputed, and the clarification issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed wafers and chips' (emphasis supplied) are to go under Chapter 38 whereas the 'diffused ones' shall be treated as falling under Chapter 85. We, therefore, have no hesitation in upholding that part of the orders of the Collector of Customs (Appeals). 19. However, we note that, thereafter, the Collector of Customs (Appeals) fell in error because there can be no gain-saying the proposition that, whereas for classification of an article for purposes of Tariff Heading or Sub Heading, resort to Interpretative Rules is permissible; it is an entirely different proposition when considering benefit of Notification to specifically given articles. A reference to Notification No. 172/77-Cus, which the appellants have set up in support of their alternative plea from the very beginning, makes it abundantly clear that what was to be excluded from the benefit of this Notification vide Column 4 against Serial No. 8(ii) was: 'diods, transistors and similar semi conductor devices'. We have no hesitation in helding that this would refer to goods, as finished product, in the known and commercial sense of the term, and not to those semifinished or un-finished articles which have been taken to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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